This afternoon, he and First Lady Laura Bush sit down for an exclusive interview -- their first for broadcast since the November election -- with Barbara Walters. Tune in to ABC's "20/20" on Friday for the full conversation.

At 12:30 pm ET, Sen. Ted Kennedy speaks at a National Press Club luncheon on "A Democratic Blueprint for America's Future." As always, watch for the Q&A section, when the man known as "EMK" is sure to get questions about the Bay State's junior Senator.

In his speech, Sen. Kennedy is expected to wade into that tricky and sticky wicket of "values," and talk about how his party should talk about what Americans are talking about -- as we said, values. Kennedy will also hit on Social Security, Iraq, and abortion -- a sort of para-state of the union, but with food.

At 3:00 pm ET/noon PT, Democrat Christine Gregoire will be inaugurated as Governor of Washington State. Chelan County Superior Court will hear Republicans' challenge to the election results on Friday.

The Commerce Department reported an all-time high U.S. trade deficit of $60.3 billion in November this morning -- up 7.7 percent from October.

Bush cabinet: Chertoff:

One news cycle down and there are three things we can say about Michael Chertoff:

A. The coverage and the reception on the Hill have been silky smooth;

B. The Gang of 500 has no earthly idea who performed the household chores in the Chertoff household for the last, say, 30 years;

C. How Sen. Clinton will vote on the nomination.

The New York Times' Eric Lichtblau on Chertoff's role in expanding the use of "material witness" warrants.
LINK

John Mintz of the Washington Post looks at the post-9/11 policies that will be Chertoff's biggest source of criticism.
LINK

The Los Angeles Times' Richard Schmitt looks at the pros and cons of Chertoff's experience -- excellent managerial skills, but without the total specific knowledge of the Department's functions. LINK

The New York Times' Stevenson and Litchblau Note the cautious but generally favorable initial reaction from some Democrats. LINK

USA Today's Mimi Hall Notes that "Chertoff's nomination comes at a time when the public is less worried about terrorism than at any time since Sept. 11. In a new USA TODAY/CNN/Gallup Poll, 39% said terrorists are likely to strike the USA in the next few weeks, the lowest percentage since 9/11." LINK

The New York Observer's Lizzy Ratner has a nice look at the history of Sen. Clinton's concerns with Mr. Chertoff. LINK

The Washington Post's Mark Leibovich looks at the confirmation successes of second choices. LINK

Social Security:

One news cycle past and there are three things we can say about the current debate on the President's "plan" to remake Social Security:

A. The commentariat on the left is working overdrive on the "there is no crisis" theme.

B. It is increasingly easy to find Republicans on background (and deeper) who express skepticism about the game and the candle.

C. And/but no one should misunderestimate the vast sales job that is about to take place.

The Wall Street Journal's John Harwood Notes the "ideological debate" underlying arguments over the fate of Social Security.

"It is an ideological debate about whether Social Security remains a social insurance safety net, which redistributes a modest amount of income from rich to poor, or moves toward greater individual opportunity, risk and reward. Bubbling with enthusiasm, Mr. Bush casts his effort to transform the Mideast as the 'philosophical argument of the age.' In U.S. domestic politics, the argument of the age concerns Social Security."

The New York Times' Elisabeth Bumiller Notes the stepped up Social Security campaign by the Administration and other interested parties:

"[Yesterday's] event was part of an intensified White House campaign to promote Mr. Bush's Social Security proposals this month. Treasury Secretary John W. Snow has been selling the plan on Wall Street, and Vice President Dick Cheney and Joshua B. Bolten, the White House budget director, will give speeches on Social Security this week. N. Gregory Mankiw, the chairman of the White House Council of Economic Advisers, will give a speech next Tuesday." LINK

The Washington Post's Michael Fletcher wraps President Bush's hard sell yesterday on his Social Security plan, and the critics he's facing over it -- including Democrats who insist his warning that the system will go bust is sky-is-falling political rhetoric, and conservatives who oppose price indexing and cutting benefits and want to stick just to personal accounts. LINK

USA Today's Richard Benedetto and Judy Keen look at the PR war between the President and his critics over what really needs to be done to shore up Social Security. LINK

Harold Meyerson says that the Bush Administration is not imaginable without the existence of Fox News Channel and talk radio. (And, yes, that belongs in this section!!!) LINK

Bush agenda:

The Washington Post's Jonathan Weisman previews what's expected to be a tough budget from President Bush that aims to rein in the federal deficit, looking to freeze spending in some areas, cut or kill some federal programs, move more Medicare and housing costs to state and local governments, and stave off growth in federal entitlement programs.
LINK

"Congressional aides have been told to expect virtually the same level of spending in fiscal 2006 as this year in programs unconnected to defense and homeland security. This fiscal year, those domestic programs grew at a slim eight-tenths of a percentage point, and Bush plans to be even tighter, ensuring that spending would not keep up with inflation in most domestic programs."

An interesting editorial in the Wall Street Journal:

"On the campaign trail last year, President Bush said a priority of his second term would be to 'build an ownership society, because ownership brings security, and dignity, and independence.' Sounds good to us. But the rhetoric doesn't square with news that the Administration may file an amicus brief against property owners in an upcoming Supreme Court case concerning eminent domain.

"Never mind that there's no pressing reason for the federal government to weigh in at all on the case, Kelo v. New London, since the issue before the court is a matter of state and local authority. What's more strange, given the President's ownership agenda and stated affinity for strict constructionism, is that the Bush Justice Department would consider siding with opponents of property rights."

The links to the Washington Times' veritable smorgasbord of their interview with the President of the United States:
LINK;
LINK;
LINK; and
LINK

Iraq:

Prime Minister Allawi admits that certain parts of the country -- "pockets," he called them -- will not be ready to vote on Jan 30. LINK and LINK

The inauguration:

USA Today's Mimi Hall runs through the state-of-the art security measures in place for President Bush's inauguration next week, including fighter jets, Coast Guard patrols, at least 6,000 police officers, and sensors to detect chemical, biological, and radiological attacks in the subway and elsewhere. LINK

DNC chair's race:

Perhaps Howard Dean's official entrance will prove a turning point, in that the other candidates can now step up and more aggressively debate the future ideological direction of the party.

One of the reasons the race has so far lacked a frontrunner is that beyond a few sound bites here and there, the candidates have yet to break out of the normal (somewhat tendentious) Democratic candidate's rubric, which is to talk about priorities and proposals and ignore, often at their peril, the central question on the minds of voters.

The voters here are the DNC membership, and it is to them that we look for clues about the direction of the race.

Here's what we gather.

--Howard Dean's floor may be larger than some of his opponent's believe, and there is nothing, aside from what appears to be an unquestioned conviction about the truth of alternative by his opponents, to suggest that he cannot really win the chairman's race.

--Dean, Martin Frost, and Donnie Fowler have been the most aggressive in courting members themselves.

--We gather that Simon Rosenberg and Donnie Fowler have slowly won support from more DNC members (even as second or third choices) than some of their opponents believe. We eagerly look forward to Rosenberg's 10:30 am ET conference call to learn about the "series of prominent national figures" endorsing him.

--We don't know, and no one really does, in the end, how much the netroots support will mean to the final result. Suggestions welcome.

--A Kate Michelman entrance could really shake things up, as could:

*The decision by one candidate to go negative on another.

*Absent the entrance of another candidate, a poll that shows one candidate blowing the field away, or a negative campaign, it's hard to see how the status quo differs going into February.

*Citing Nancy Pelosi and Harry Reid are not guarantors of success here, and in fact some DNC members grumble that the two congressional Democratic leaders have performed rather poorly in shaping the contours of this contest.

We eagerly await the next Hotline survey of DNC members.

The first reporter to do a solid story on how much some of these folks are raising (and who they're raising it from) gets a gold star.

The Hill says that John Kerry and other would-be presidential candidates have taken a hands-on interest in who the next chair will be. A must-read for those keeping score at home, and not just for the Jim Blanchard quotes. LINK

Kerry is apparently vetting the leading contenders for the chairmanship, and other possible 2008 contenders -- including Sens. Evan Bayh and Hillary Clinton, New Mexico Gov. Bill Richardson, Virginia Gov. Mark Warner -- have been getting and making phone calls too. LINK

". . . Kerry appears to be the only potential candidate in '08 to maintain an open line of communication with the DNC candidates and has further set himself apart by requesting that the next DNC chairman remain neutral three years hence, when the Democratic selection process begins anew. Last week, Kerry asked former Rep. Tim Roemer (D-Ind.), whose home-state Democratic senator, Bayh, may run, to remain neutral."

". . . Kerry has also been trading phone calls with the man who ran his presidential campaign in Michigan, Donnie Fowler. Kerry's conversations with former Vermont Gov. Howard Dean have increased in frequency."

The Seattle Times' Ralph Thomas and Andrew Garber wrap the demonstrations -- to re-vote and not to re-vote -- outside the Washington state capitol yesterday, where lawmakers certified Democrat Christine Gregoire the Governor-elect. The duo Note that Rossi supporters outnumbered Gregoire's crowd by 10-to-1. LINK

Chris McGann and Kyle Arnold of the Seattle Post-Intelligencer walk through the floor debate and the protests yesterday and wrap the coming court challenge. LINK

Democrats decided to get in on the lawsuit action on Friday, filing a motion yesterday to join Secretary of State Sam Reed and county auditors in defending the election results against the state Republican Party, which is seeking to overturn the them and get a re-vote. LINK

Michael Slackman's analysis Notes that Bloomberg's re-election is dependent upon convincing voters to credit him with the successes he cites. LINK

Gov. Schwarzenegger has set a special election date of May 3 for voters to choose a successor to Rep. Robert Matsui, AP reports. If a candidate wins a majority in the March 8 primary, there won't need to be a May election.
LINK

The Sacramento Bee reports that Doris Matsui has told people she intends to run. LINK

Boston Mayor Thomas Menino wants to use $1 million in leftover funds given to the city for the Democratic National Convention to beautify the city's neighborhoods -- with the election just 10 months away, the Boston Globe's Andrea Estes Notes. LINK

Correction: Yesterday when we wrote about the DNC contribution to the Virginia gubernatorial race, we of course meant that Warner ran in 2001, not 2003. And to you eagle-eyed watchers of Virginia politics, Warner delivers the state of the Commonwealth address tomorrow. Thomas Jefferson would be proud. We regret the errors.

2006:

AP reports that Democrat Lawton "Bud'' Chiles III will run for governor in 2006. LINK

Former Rep. Joseph Kennedy announced yesterday that he will not seek the Democratic nomination to challenge Gov. Mitt Romney in next year's gubernatorial election. LINK

But Rep. Ray LaHood (R-IL) is thinking about getting in the race for Illinois governor. LINK

The New York Observer's Ben Smith has an interesting look at the business of being Mrs. Libby Pataki. LINK

The Schwarzenegger era:

Citizens to Save California, "a coalition of business and taxpayer groups friendly to Gov. Arnold Schwarzenegger is preparing to raise tens of millions of dollars that can be used to push for initiatives the governor appears set to champion in a special election campaign," the Los Angeles Times' Peter Nicholas reports.
LINK

CBS documents:

Howard Kurtz examines the criticism fired at the CBS report for finding that there was no evidence of political bias in the report on President Bush's National Guard service, and tick-tocks CBS' initial response to critics who questioned the story when it ran. LINK

Politics:

Be sure to read Deborah Solomon's article on C1 of the Wall Street Journal.

"Securities and Exchange Commission Chairman William Donaldson, facing business and political criticism for advocating an agenda that some consider too regulatory, is softening his stance on two controversial proposals he initially championed."

"In recent weeks, Mr. Donaldson has told SEC staffers and others that he is reconsidering his support for a proposal to overhaul the way stocks are traded in the U.S., according to people who have spoken to him about the matter. The New York Stock Exchange opposes the proposal, and now Mr. Donaldson may back a less-radical plan for overhauling trading rules."

This will resonate in circles near and far.

The Ohio activists who have asked the Ohio Supreme Court to dismiss their lawsuit challenging the state's election results are considering filing a federal lawsuit "alleging civil rights violations or seeking to intervene in a federal suit filed by the Green and Libertarian parties," the Cleveland Plain Dealer reports. LINK

Dicker's deputy on a plum job for a Democrat who seemed to have helped George Pataki. LINK

Tory Newmyer of Roll Call reports that former Sen. John Breaux (D-LA) starts work at Patton Boggs on Monday as senior counsel, as well as two New York-based financial firms, Riverstone Holdings and the Clinton Group. Add those three gigs to the President's task force on overhauling the tax code, and it gives new meaning to the idea of a second act in American politics.

Deb Orin on Bruce Lindsey testifying before a grand jury investigating Sandy Berger, in the New York Post. LINK

And Victoria Toensing and Bruce Sanford pen a Washington Post op-ed in which they question whether a crime was even theoretically possible in the Plame case, given the underlying facts; in other words "Free Matt Cooper." LINK